The normal functions of the lung depend critically upon the correct organization and interaction of many different specialized cell types. These include the epithelial cells of the distal alveoli and proximal airways, and the mesenchymal cells of the blood vessels, airway smooth muscle and cartilage rings. In addition, mechanisms normally exist that enable the adult lung to undergo remodeling and repair in response to inflammation and injury. Abnormalities in the proliferation, differentiation and morphogenesis of the different cell types of the lung can lead to serious pathological conditions, including chronic lung disease of premature babies, interstitial fibrosis, asthma and lung cancer. The goal of this proposal is to test specific predictions about the roles of the important Bone Morphogenetic Protein (BMP) intercellular signaling pathway in the development and postnatal remodeling of the mouse lung. Previous gene expression studies, transgenic gain and loss-of-function experiments, and in vitro culture assays have provided evidence that genes encoding BMP ligands, antagonists, and receptors play critical roles in lung development and disease. However, many important questions remain unanswered. Among these are (1) the precise roles of BMP signaling through different receptors and ligands in the epithelium versus the mesenchyme, (2) the mechanisms by which BMP signaling in different cell types and at different stages regulates distinct processes of cell proliferation, lineage specification, differentiation and morphogenesis and (3) the role of BMP signaling in the poorly understood processes of postnatal lung repair and remodeling that appear to involve both changes in cell phenotype (transdifferentiation or metaplasia) and the proliferation and differentiation of progenitor/stem cells. We will address these questions using a variety of techniques, including conditional gene deletion based on Cre/lox technology, in vitro culture of normal and mutant lung cells and models of lung inflammation and injury. Taken together, these experiments will throw new light on the mechanisms by which extracellular signaling pathways interact to control the growth, development and postnatal repair of an organ system that is essential for human life. Moreover, the results will be relevant to other organs that develop by the process of branching morphogenesis.